Public Procurement Of Innovation Research Articles

Innovative public procurement policy failure: a case analysis from Poland

Objectives: The rising popularity of innovation public procurement (IPP) sets a question about conditions as an effective tool of transformative policies, including the governance level, coordination and strategic development. The purpose of the article is to explore the failure of governance in a Polish IPP to present how IPP guidelines are implemented empirically. The other contributions refer to merging DARPA’s approach and IPP. Research Design & Methods: The research article presents conclusions from the case study of first large-scale trial of public procurement procedure with respect to an innovative partnership in Poland. Findings: The case is a rarely analyzed example of policy failure and shows that ignoring stakeholders’ needs, timeline constrains and market capacity can result in policy failure. Program history highlights that proper risk analysis and adaptation to the market context can prevent program failure. Implications / Recommendations: The article opens up a field for considering what steps are crucial in formulating IPP. The analysis leads to the main conclusion that transformative policy frameworks using demand- pull tools need to be embedded in the market realities and capabilities of national innovation systems. Article classification: research article

The Impact of Globalization on Innovative Public Procurement: Challenges and Opportunities

Incorporating circular economy principles into forward-thinking public procurement strategies enhances sustainability through the promotion of resource efficiency, sustainable sourcing, and extended producer responsibility. This approach not only encourages innovation and collaboration among suppliers but also drives the development of solutions aligned with circular economy goals. The ultimate result is a more cost-effective and environmentally friendly outcome in procurement. This article seeks to investigate the intersection of circular economy principles within the framework of an innovative public procurement system. The study explores the influence of globalization on this innovative public procurement paradigm, addressing both the challenges and opportunities inherent in the process. The study conceptualizes Innovative Public Procurement (IPP) as a strategic approach where public entities acquire goods, services, works, and utilities, emphasizing an optimal balance between price and quality. The central goal is to generate innovative benefits for both entities and society, all while minimizing adverse environmental effects. Employing traditional research methods, including the monographic method, document analysis, and comparison, the study illustrates how public procurement practices can be opened to innovators, including start-ups and innovative SMEs. The findings shed light on the challenges faced by these entities in navigating the procurement landscape, while emphasizing the potential opportunities arising from the synergy between innovative procurement practices and the circular economy. By adopting a holistic perspective that considers the full lifecycle costs and environmental impacts of goods and services, procurement decisions can prioritize options offering superior long-term value. This contributes to the broader transition towards a circular economy, effectively minimizing adverse effects on the environment...

Transformative public procurement for innovation: ordinary, dynamic and functional capabilities

ABSTRACT Public Procurement for Innovation (PPI) requires multiple roles from the public administration according to the problem-solution space, delineated by the level of consensus around the definition of the needs of the contracting authority and the potential solutions to address them. Each role involves a distinct mix of capabilities, which we categorize as ordinary (i.e. doing things right), dynamic (i.e. doing the right things) and functional (i.e. addressing functional challenges). Following a Mutual Learning Exercise with procurement officials of 15 European countries, we identify 45 capabilities for contracting authorities to embrace the different facets of PPI as a transformative policy instrument.

Closing the loop without reinventing the wheel: public procurement for innovation promoting a circular economy

Abstract This theoretical paper adopts a procedural perspective to identify the challenges associated with the implementation of the full scope of approaches to circular public procurement (CPP). We contend that beyond considering CPP from a substantive standpoint (i.e. the procurement affects outside of the organization), adopting a procedural perspective (i.e. the procurement affects inside an organization) to public procurement can pave the way for reflecting transversally on how CPP can borrow from public procurement for innovation (PPI). Building on the challenges identified in the literature on CPP, we identify that PPI can contribute to consolidating CPP through such mechanisms as market engagement and intermediation, functional specifications, and coordinated unbundling. We provide illustrations for each of the identified procedural contributions of PPI to CPP derived from five cases. We discuss how procurement capabilities and evaluation can act as critical drivers for moving from a substantive to a procedural approach to CPP.

Editorial Presentation - Perspectives on innovation governance: challenges and dilemmas

Editorial Presentation - Perspectives on innovation governance: challenges and dilemmas

Markets for Promoting Innovation in Health Care? A Market Practice Study of Public Procurement of Innovation (PPI)

This article critically analyzes public procurement of innovation (PPI) as an instance of using markets or market-like aspects as a means to resolve public concerns. It reports findings from a case of procuring radiation therapy equipment for a university hospital in Stockholm, Sweden. By extending a line of literature built on economic sociology as well as science and technology studies (STS), the study elaborates on public actors’ efforts in framing markets to promote innovation. The case illustrates how the participating actors constructed the notion of innovativeness to be introduced into health care as means of addressing various public concerns. It also reveals the intended—and unintended—consequences of PPI as manifested in various actors’ claims on the value of PPI realized in practice. The study suggests that it is extremely difficult to frame a market for the realization of innovation via procurement as a policy instrument because we cannot predict the ultimate impacts of devices and practices employed in such initiatives. By formulating a practice-based critique of PPI, our study invites important questions about the potentiality of such instruments for governing innovation without delimiting their consequences to the success-or-failure dichotomy as prescribed in predefined tools and strategies.

The dynamics of innovation in CoPS industries: evidence from the Brazilian aerospace industry

ABSTRACT This article frames the central role played by mission-oriented public procurement in the Brazilian aerospace industry. The difficulties in mastering and promoting the evolution of several disciplines at the firm level, with a relative scarcity of funds for an R&D-intensive industry and an incomplete national innovation system represent merely a fraction of the threat faced by those dealing with Complex Products and Systems. The culture of financing flagship projects using public procurement narrows the potential solutions for complex problems, imposes time constraints to mature critical technologies and exposes these endeavours to high levels of risk. By taking the Dynamic Capabilities as a theoretical framework and Technological Readiness Level as a yardstick to the decision-making process, we have developed a construct to explore two in-depth cases. A cultural shift is required, aiming at providing the means to the progressive maturation of critical technologies using public procurement for innovation.

Managing the Fuzzy Front-End of Public Procurement of Innovation

Managing the Fuzzy Front-End of Public Procurement of Innovation

Creating and maintaining momentum – relational work in public-private innovation partnerships

ABSTRACT This study addresses the scantly examined work done by individuals to develop reciprocal relationships and maintain momentum throughout public-private innovation partnerships. We combine insights from the public-private innovation partnership literature with the notion of relational work from economic-sociology to analyse cases of public procurement for innovation (PPI) and pre-commercial procurement (PCP). We identify patterns of relational work stimulating continued interaction across different phases of the PPI and PCP instruments. Contributing to the debate on creativity versus constraints in public-private innovation partnerships, we present relational work as reciprocal and intentional activities to influence the social-symbolic structures in which they are embedded.

Public procurement for innovation: Lessons and challenges of a COVID-19 vaccine contract

During the COVID-19 pandemic, which triggered a worldwide emergency call to pursue new drugs and devices to treat and cure the disease, vaccines began to be developed mid-2020, as a promising weapon and shield. Fiocruz, a Brazilian government science and technology institute, signed a public procurement for innovation contract with the foreign pharmaceutical company AstraZeneca to purchase, at that time, vaccines still under development. It was the first public procurement for innovation contract in the Brazilian public health system (SUS). This paper analyzes how the Brazilian public procurement contracts for the COVID-19 vaccine dealt with technology and institutional risks and uncertainties. It also aims to describe how such agreements (and the legal apparatus behind them) relate to the Brazilian system of innovation and to the theoretical approach of contracting for innovation. A key question is: how does the public procurement for innovation vaccine contract signed by Fiocruz deal with the intrinsic nature of uncertainty that characterizes innovation, and what lessons and challenges can be drawn?

Towards a successful implementation of public procurement for innovation: the case of Iran’s oil industry

ABSTRACT Public procurement for innovation (PPI) is an assertive demand-side innovation policy. However, research is behind in understanding the know-how of designing and implementing successful PPI, particularly in developing economies. This study's primary goal is to provide a conceptual framework of influential factors in designing and implementing a successful PPI. To this aim, we did a case study on some projects under the PPI initiative, defined for Iran's oil industry. Reviewing the corresponding literature and analyzing the case materials, including interviews, observation, and documents, our findings suggest a conceptual framework that includes four categories of influential factors in the successful implementation of PPI: contract-dependent, buyer-dependent, supplier-dependent, and infrastructure-dependent factors. This study contributes to the literature on public procurement for innovation policymaking, particularly in the context of emerging economies seeking to catch up, and can also be used as a manual by authorities in the field of technology and innovation.

A European arena for joint innovation in healthcare: The Platform for Innovation of Procurement and Procurement of Innovation (PiPPi).

By 2000 the European Union (EU) had recognized that its innovation capacity was underperforming in comparison to similar competitors and trading partners. Although the EU has made an effort to stimulate public research and development (R&D) through policy tools like Pre-Commercial Procurement (PCP) and Public Procurement of Innovation (PPI), starting with the 2000 Lisbon strategy and continuing through the 2021 updated Guidance on Innovation Procurement, there has remained a gap in knowledge of and use of these tools, in particular within healthcare. The past decades have seen an explosion in the number and use of digital technologies across the entire spectrum of healthcare. Demand-driven R&D has lagged here, while new digital health R&D has largely been driven by the supply side in a linear fashion, which can have disappointing results. PCP and PPI could have big impacts on the development and uptake of innovative health technology. The Platform for Innovation of Procurement and Procurement of Innovation (PiPPi) project was a Horizon 2020-funded project that ran from December 2018 to May 2022 with a consortium including seven of Europe's premier research hospitals and the Catalan Agency for Health Information. To promote PCP and PPI, PiPPi established a virtual Community of Practice (CoP) that brings together all stakeholder groups to share and innovate around unmet healthcare needs. This perspective presents a brief history of PCP and PPI in Europe with a focus on digital innovation in healthcare before introducing the PiPPi project and its value proposition.

INTERNATIONAL AND INTERDISCIPLINARY ∙ Policies to Stimulate Industrial Innovation by Small and Medium-Sized Enterprises:

Since the outbreak of COVID-19, Small and Medium-sized Enterprises (SMEs) have faced a heavy economic burden and uncertainty due to a contraction in resources and markets. As the world returns to normal conditions, we aim to synthesise key lessons from the pandemic and discuss which emergency actions should become routine to prevent or minimise the negative economic impact of future crises on SMEs and their innovation power. This paper reviews academic and non-academic literature on how governments can stimulate industrial innovation in SMEs based on experiences from public procurement of innovation during the pandemic. Our findings indicate that public procurement of innovation is a crucial tool to stimulate both the economy and new ideas. Against this backdrop, we propose the implementation of three related procurement policies: inter-agency and inter-governmental collaboration in the public procurement of innovation, cooperation partnerships between the government and firms, and the adoption of practices that encourage SME participation in the procurement of public innovation contracts. Keywords: small and medium-sized enterprises; innovation; emergency management; procurement of innovation

Analyzing the legal environment for public procurement as a demand-side innovation policy measure

PurposeThis paper aims to analyze Brazil’s legal and institutional arrangements for the design, implementation and accountability of public procurement for innovation (PPI) and to investigate how this apparatus has been adjusted, modified and even replaced to enable its use in innovation policies.Design/methodology/approachIt is a descriptive analysis of the legal framework for PPI in Brazil supplemented with case reports of ongoing PPI contracts.FindingsDespite the significant advances in the PPI legal framework in Brazil, this instrument’s implementation is still limited. A disconnection between PPI and innovation policy goals and legal-institutional constraints are reasonable answers to this problem.Social implicationsLaw is closely related to the design, implementation and control of public policy tools. However, there is still a tine understanding of how the legal framework can corroborate or constrain new mechanisms to state purchase power, such as PPI.Originality/valuePublic procurement is the most crucial tool of demand-side policies for innovation, and it is implemented according to the legal framework in each country. This paper adds to the law and innovation research agenda, providing an overview of the Brazilian PPI legal framework and how it is going so far.

Facilitating public procurement of innovation in the UK defence and health sectors: Innovation intermediaries as institutional entrepreneurs

This paper investigates how innovation intermediaries promote institutional change to facilitate public procurement of innovation (PPI). Several of the PPI implementation challenges reported in prior research originate in the institutional architecture underpinning demand articulation, and innovation procurement and adoption processes. We conceptualise innovation intermediaries as institutional entrepreneurs who seek to create new institutions or adjust existing ones to support PPI implementation. We report the results of two case studies of intermediaries facilitating PPI in the UK defence and health sectors, respectively. We contribute to PPI intermediation literature by showing that intermediaries address prevalent institutional failures through four types of institutional entrepreneurship activities: boundary spanning; advocacy; design of change; and capacity building. We elucidate, in particular, the role of individuals within intermediaries, as agents who learn about failures and adapt their institutional work over time. In doing so, these managers go beyond the remit and goals of the organisations they represent. The findings add to our understanding of how intermediaries support demand articulation for PPI by showing that their institutional work is also aimed at designing generic methods and processes to improve what is asked for, and how. We furthermore reveal conditions influencing the effectiveness of intermediaries' efforts to realise institutional change, thereby extending research on institutional entrepreneurship in PPI settings.

GOVERNMENT SUPPORT TO BUSINESS INNOVATION POTENTIAL: FUNDING MECHANISM AND IMPETUS FOR GROWTH UNDER MARTIAL LAW

The article addresses the issues of finding pathways to foster the national economic growth against the martial law context. It is noted that with the start of hostilities in Ukraine, all business processes and the normal functioning of the economy slowed down, in particular, this refers to innovative activities, research and development, intellectual property and the overall national innovation potential. The paper observes that there is an objective need to build an effective innovation funding mechanism which will provide an opportunity to generate accumulated assets in the key priority areas to enhance the innovation potential of Ukrainian businesses. It is emphasized that this mechanism of financing innovations should rely upon the following fundamental principles: targeted focus towards financial vectoring; verified justification and legal support to primary sources of assets; a polystructural character of asset sources; financial depth and breadth; adaptability of the funding system to wartime conditions to gain synergy from using its constituent elements. Based on international best practice, it is argued that business innovation support and innovation effectiveness rest largely on the funding timeliness and target focus. The study suggests that the innovation funding mechanism will create favourable environment to ensure prompt and efficient implementation of innovation processes in all areas of business. In the context of this study, government support to business innovation potential is viewed as part of the overall business strategy in strengthening and boosting innovation potential for the future. According to the research findings, the key impetus to support innovations under martial law are the following: motivational incentives for business units and companies engaged in investing in research and development of innovative enterprises; encouraging the creation of research centres; promoting innovative and technological growth zones; active assistance in facilitating modernization of innovative businesses; government grant initiatives and preferential lending programmes; innovation export support and promotion; in-depth support to innovative public procurement schemes; making use of a special tax regime for intellectual property products which contributes to shaping a favourable tax rate on income from intellectual property commercialization. The study offers important implications for further research in developing an effective framework to boost innovations which will enhance collaboration and increase the efficiency of research, industrial, financial, innovative and personnel potentials. Ultimately, this will have a positive effect on encouraging global cooperation in the vector of innovative activities, will ensure technology transfer and innovation commercialization, as well as contribute to increasing the share of innovative products in world markets. The implementation of the above priority objectives will help Ukraine to respond to modern challenges, overcome the current crisis and spur further economic growth.

Public procurement for innovation through supplier firms' sustainability lens: A systematic review and research agenda

AbstractPublic sector purchasing processes are gaining increasing prominence as a demand‐side innovation tool for addressing national sustainability challenges. Accordingly, there has been growing research attention to this topic. Prior studies suggest three key rationales that underlie the use of public sector procurement to drive innovation: (i) the buyer–user rationale (for creating new needs); (ii) the market/system failure rationale (for improving suppliers' capacity to innovate); and (iii) the public services rationale (for improving public services). However, operational activities at the upstream supply chain affecting the sustainable innovation capacities of supplier firms appear to be under‐researched in the public procurement for innovation (PPI) scholarship, despite knowledge about innovation capacity being critical to successfully implementing PPI. This paper adopts a systematic literature review approach to synthesise existing fragmented literature on sustainability‐oriented PPI, focusing on supplier perspectives. Findings from a synthesis of 41 relevant articles suggest, among others conditions, that a procurement framework that maintains a good balance of competition and innovation, builds buyer–supplier relationship and urges strong supply networks, maintains a stable political commitment, offers security for niche markets with effective innovation risk management culture would enhance suppliers' sustainability capacity and propensity to innovate. This paper contributes to the PPI literature and the literature on determinants of sustainable innovation systems from supplier firms' sustainability lens.

Predicaments during a period of health emergency: Waiving patent protections or innovative public procurement? The example of advance purchase agreements (APA) for COVID-19 vaccines.

The health emergency provoked by the worldwide pandemic requires immediate action to achieve the immunization of the population and to stop further contagion. The systems of public procurement needed to adapt in a very short time to reach agreements with the pharmaceutical industry. Proposing options between the waiving of patent protections and innovative public procurement, principally the European Advance Purchase Agreements (APA). A description of the actual situation and the necessary regulatory reforms. The sources are scientific articles, legislative compendiums and opinion pieces and the current press. The debate over the waiving of patent protections at this time is both misleading and ineffective due to the economic and legal problems involved. The path of the APA has proven to be very effective, although some deficits should be corrected, principally regarding questions of transparency and confidentiality. Among the possible options for the acquisition of the COVID-19 vaccine and its universal access, agreements and cooperation between States and innovative industry are desirable. One successful path is that of the advance purchase agreements utilized by the European Union, another could be that of voluntary licensing. We propose following these routes as opposed to the waiving of patent protections.

Procurement innovation as a vehicle for sustainable change – a case study of the Danish model of strategic partnerships

Purpose Efficient and effective knowledge transfer is important in complex building renovation projects. The addition of sustainability requirements in building renovation adds complexity. This paper aims to investigate the development of innovative public procurement schemes to support sustainable building renovation projects. These blueprints for procurement innovation can support similar efforts in other countries. Design/methodology/approach This study is based on a longitudinal case study using interviews with primary stakeholders and workshops with industry practitioners to supplement the analysis of public tender documents from the Danish public building clients. Findings The key tenants of the Danish model for strategic partnerships are a single strategic partner, systematic conflict resolution, framework agreements, risk management and joint educational programs. Three phases in the development of the procurement scheme are identified: experiment, definition and replication. Originality/value Strategic partnerships and other types of relational contract schemes are not very prevalent in most countries. How these contracts are developed and defined is not well understood. This paper shows how one such contracting scheme is developed, how it is defined and replicated.

Revealing and resolving bottlenecks by multiple intermediaries in public procurement of innovation

Novel approaches to innovation policies that try to solve societal problems have grown significantly and gained considerable attention recently. Studies argue that while novel innovation policies require significant policy capacity to shape transformational changes, top-down initiative is largely irrelevant; bottom-up policy capacity is needed to shape these changes. However, little is known about how relevant actors are organized to direct bottom-up explorations for impactful innovations. By analyzing a case of public procurement of innovation in Finland, this study demonstrates that by revealing and resolving bottlenecks and dissonances among actors, intermediaries can induce actors to focus bottom-up, exploratory efforts in certain directions that can increase the impact of innovations, and the synergy of multiple intermediaries with different goals can catalyze innovation in a complementary and productive fashion. The study's findings suggest that our understanding of intermediaries should be expanded given the fact that their role in revealing bottlenecks can be essential in inducing explorative activities to increase the impact of innovations has been largely neglected. Our finding that the diversity of complementary goals of multiple intermediaries matters also suggests that the rich ecology of intermediaries complements the policy capacity of governments.